The First Indemnity Professional Liability Blog

Posted By: John Randolph

Retired, But Not Out: The Value of Extended Reporting Tails-Retirement

Whether it was an ill-considered tuxedo rental or a momentarily trendy hairstyle, everyone can relate to having made a mistake in their past where the phrase "I should have known better" applies. It's when those mistakes return to haunt us, either in recently discovered photos or an unexpected lawsuit, that the real pain begins.

Being prepared for past mistakes to reappear is the key to avoid being completely blindsided.

For attorneys, one of the ways to make sure the past can't wreak havoc on one's present or future is making sure you have an extended claim reporting endorsement or tail. It's the best defense for an attorney who retires or otherwise leaves the practice of law.

An extended claim reporting endorsement is rarely found in a standard professional liability insurance policy. Such an endorsement is usually only available for an additional premium, although First Indemnity includes an extended reporting tail in its professional liability policy as standard for attorneys. Other claims-based policies may only offer the extended reporting tail at the insurers' option. If such policies offer extended reporting, this is often only for a short term that can be as brief as 30-to-60 days after the expiration of an attorney's professional liability policy.

Having this coverage is critical if an action taken by an attorney later turns into a lawsuit. If a loss or injury occurred while an attorney's professional liability insurance policy was active for an insurable incident, but the resulting claim isn't made until after that policy's expiration, an extended reporting tail would provide coverage. The only exception would be if an attorney has an occurrence-based professional liability insurance policy.

The extended reporting tail often provides all the coverage you had under your professional liability insurance policy. It should also offer an unlimited time frame following the end of your legal career.

Too often, attorneys don't explore this option either on their existing professional liability policy or as part of their risk mitigation plan when they retire, take an in-house position, enter politics or otherwise leave the private practice of law.

I recommend it to all our clients because you never know what is around the corner. Although you may plan to practice law for 50 years, unforeseen circumstances, like a car accident, family health emergency or even an unplanned relocation, could alter those plans

Better safe than sorry.